The various interested parties of the mining industry have had significant disagreements in South Africa, with labour, government business and local communities all clashing with each other in the recent past. Against that backdrop, the Minister for Mineral Resources Gwede Mantashe calls for more unity between stakeholders.
We are not enemies with industry stakeholders
Rebuilding the levels of trust and confidence in the sector is paramount to return us to the business of mining. It is not a secret that when I came into the department, one of the major challenges faced by the industry over the past few years was the breakdown in stakeholder relations between the department, business, labour and communities.
We have invested time and effort to rebuild these relationships. It is important for all of stakeholders to appreciate that we are not enemies. Thus far, this relationship has been restored to a level where we have had an open engagement on several matters affecting the sustainability and competitiveness of the sector.
Mining has played an integral role in the economic growth and development of South Africa since its inception. Among the measures we have embarked upon to respond to the President’s directive for each Ministry to contribute to attracting Foreign Direct Investment (FDI), include completing a review of the Mining Charter. De Beers is pleased with this and is already in the process of undertaking prospecting in over twenty areas. This will add impetus.
At the same time, also having consulted with the oil and gas industry – and they consent; we will develop legislation and regulation for oil and gas. This will enable this sector to do exploration without hindrance. Already there is a potential of R2 billion to be injected into the economy when this happens. Total has been waiting in the wings to begin drilling, which is aimed to begin before the end of this year.
Second, we have been encouraging mining companies that have placed some of the shafts under care and maintenance to either operationalise these themselves or offer them to other small operators that can ensure mining occurs in these shafts.
Third, is our strong drive to drive to increase exploration, with a proposal for specific tax incentives on exploration projects. To this end, the South African government has also committed to a R20 billion ten-year mapping programme. The programme will be a great platform in rebuilding and protecting the rich and unique geological heritage of South Africa.
Fourth, we are cleaning up our system of applications for permits and licenses for mining rights.
Fifth, we have been engaging with the mining industry – the Minerals Council (formerly, Chamber of Mines) and the CEOs of companies; on how it could respond to the President’s proposed stimulus package. Among the issues for consideration here are, the lowering of costs of doing business.
Lastly, we have been interacting with numerous potential investors, where our message is that South Africa is open for investment in mining.
Restoring Investor Confidence
We are always open to talk to any investor, consider what they place before us and what they believe or perceive to be obstacles to investing in our country. We have begun stabilising the Department by appointing senior personnel at the levels of Deputy Directors General; who have skill, expertise and knowledge of the sector. We have taken all our senior managers, including in the regions, through a training course on ethics and ethical leadership. The intention is that they begin to appreciate that they are here to deliver service for the common good and do not serve their individual interest. Cognisant of what the situation was when we arrived in this Department, we should accept that it is going to take more concerted effort to reach where we all would want to be. However, we are determined to turn things around. This is our commitment.
Reacting to Current Trends
There are currently challenges but the industry should not be despondent in the face of them. At present we are discussing and trying to inject stimulus on platinum. We are looking at ways of increasing platinum demand, which includes producing the Mandela Coin. South Africa accounts for 94% of known global reserves of the platinum group metals (PGMs), including the highest reserves of vanadium, vermiculite, fluorspar, titanium and zirconium. In terms of revenue, currently the leading mineral in the economy is coal. Chrome and manganese are both doing well and have the potential to grow.
Another aspect is that of mining companies themselves. A paradigm shift is required, where they appreciate that expending in unnecessary infrastructure and bloated overheads during a boom is not sustainable. Therefore, how they are structured is central to the sustainability and profitability of the company in good times and difficult ones. What is certain is that old methods, and knee-jerk reactions, neither work nor are they sustainable.
As a leading producer and supplier of a range of these minerals, the country offers a highly competitive investment location, enabling us to meet specific trade and investment requirements of prospective investors and business people, as we meet the developmental needs of our people.
South Africa continues to see its growth and development along with that of the whole continent. Our country’s membership of BRICS, and in other forums where we are the only African participant – and where other African countries participate, is an indication of how we seek to ensure that the advantages that accrue also extend to the whole of the continent. On the mineral resources front, we work with various African countries; helping with expertise and skills they are without or lack. Fundamentally the policy of our government, as stated, is a better South Africa; a better Africa; and a better global society.